Modigliani and Miller argued that the dividend decision:

CS Executive · Financial and Strategic Management · PYQS · June 2024
Modigliani and Miller argued that the dividend decision:
(A) Is relevant as the value of the firm is not based just on the earning power of its assets
(B) Is irrelevant as the value of the firm is based on the earning power of its assets
(C) Is irrelevant as dividends represent cash leaving the firm to shareholders, who own the firm anyway
(D) Is relevant as cash outflow always influences other firm decisions

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Financial Management

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